DABS breaks ground on 10MW solar power plant

KANDAHAR (Pajhwok): A 10-megawatt solar power plant, the first of its capacity in Afghanistan, is now under construction near the southern city of Kandahar, the United States Agency for International Development (USAID) said on Sunday.

A ceremonial groundbreaking event for the privately-owned solar power plant was attended by government officials including CEO Abdullah Abdullah and representatives USAID, Da Afghanistan Breshna Sherkat (DABS) and the Indian company contracted to build and operate the site, a USAID statement and an official said.

The $19 million project was made possible by $10 million in incentive funds by USAID to mitigate the risk to the contractor, Dynasty Oil & Gas, Ltd.

The US agency said DABS negotiated a 15-year ‘Power Purchase Agreement” with Dynasty under which “the firm is committed to sell power to DABS to increase the power supply in a volatile region where demand for energy far outstrips available resources.”

DABS used an innovative reverse auction to solicit bids for the contract and hold down project costs, inviting qualified bidders to participate in the online auction, held on July 16, 2016. The bidders were required to submit bids at a starting price established by DABS, and the lowest bid won the contract.

“This privately-owned and maintained solar power plant will be an important step toward solving the critical shortage of power in Kandahar,” DABS CEO Amanullah Ghalib said. “It will provide electricity to an industrial park, thus enabling additional private sector investment in the area,” he added.

Acting USAID Mission Director in Afghanistan Michael McCord said the private sector “is the key to further development of Afghanistan’s energy sector.”

“We are encouraging many more private and public investment agreements in Afghanistan, which will lead to more economic growth, security and prosperity for the Afghan people,” McCord said.

Our correspondent adds: Amanullah Ghalib said the $19 million solar power project would be ready by August, 2018 on 80 acres of land in Daman district.

CEO Abdullah expressed happiness over the launch of the first solar power project in Kandahar. He said the main issue in Kandahar was electricity, affecting the industry the most.

Ghalib said after every four months, the plant would start producing two megawatts of electricity and there would be no need to wait for one year until the project was completed.

He said the Indian contractor would sell one kilowatt of electricity against 7.3 afghanis and after 15 years, the plant would be handed over to Afghanistan.

Faizulhaq Mashkani, deputy head of the Kandahar Industrialists Association, said the shortage of electricity was a huge issue in Kandahar.

Residents and factory owners had suffered a lot due to the shortage of power, he said, adding 154 factories were half functional and some 135 others had closed down due to the shortage of electricity.

“Hundreds of interested investors have been waiting for the availability of electricity so they could establish factories.”